One Problem GM Does not Have

Honda To Boost Civic Production – International Business Times –

Today, Tuesday, November 14, 2006, the big three “American” automakers (Chrysler is not really American anymore) met with President Bush to beg for handouts. Getting creamed in the marketplace should be no grounds for handouts, but chances are that they will get it.

Interestingly, one request would be for the US government to move toward a universal payer system, like in Europe and Japan, whose automotive output has utterly vanquished the big three, especially GM.

Meanwhile, Honda is having problems meeting demand for its cars! After decades of customer clamor for fuel efficient cars, you think that GM would have understood, but they did not. They continued building on ancient chassis, ancient assembly lines and ancient technology in order to maintain 10% profitability in an industry defined by 3% profitability and high capital investments. The resulting erosion of market share for Ford and GM (Chrysler is doing surprisingly well) should come as no surprise. Of course, Chrysler’s exception may well be attributed it to its German ownership.

Ultimately, the fault falls on the shoulders of shareholders who are stupid enough to tolerate CEOs more concerned about their bonuses than the well-being of the company. Nevertheless, if the CEOs who commit this sort of highway robbery (literally, in a way) face with no consequences down the road, GM shareholders will not be the only ones who suffer from GM’s ultimate demise.

Ah, to have Honda’s problems….

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